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In 2019, California passed Assembly Bill 5 (AB 5), which assumes a worker is an employee, rather than an independent contractor, unless three criteria are met. In August 2020, the Superior Court of San Francisco ruled that Uber and Lyft had violated AB 5.

Proposition 22 is a ballot initiative that would override AB 5 to classify app-based drivers as independent contractors, not employees. DoorDash, Lyft, Uber, Instacart, and Postmates have provided $110M in campaign funding for Proposition 22. The stipulations can be found here. Proposition 22 is scheduled to be voted on on November 3, 2020.

In Q2 2020, Uber's adjusted EBITDA for the mobility (i.e. ride-sharing) segment was 50M. Historical data can be found in Uber's quarterly reports.

If California passes Proposition 22 to classify app-based drivers as independent contractors, what will Uber's adjusted EBITDA for the mobility segment be in Q1 2021?

Resolution:

• If Proposition 22 is passed before March 31, 2021, this question resolves according to the adjusted EBITDA for mobility reported in Uber's Q1 2021 quarterly report.
• If Proposition 22 is not passed before March 31, 2021, this question resolves ambiguously. This includes if the vote is canceled, if it is postponed to a date before March 31, 2021 and then does not pass, or if it is postponed to a date after March 31, 2021.

Other possible world:

• If California does not pass Proposition 22 to classify app-based drivers as independent contractors, what will Uber's adjusted EBITDA for the mobility segment be in Q1 2021?

See the rest of the Possible Worlds Series here.